COSMOTE announces that on 26.5.2005 its Board of Directors approved the signing of an agreement between COSMOTE, ROMTELECOM and COSMOROM under which COSMOTE will acquire 70% of COSMOROM's capital by participating in a capital increase of the latter. More specifically, as part of this agreement, COSMOTE will contribute euros 120 million in cash to COSMOROM's equity capital in exchange for a 70% equity stake in COSMOROM, with ROMTELECOM retaining a 30% stake. Furthermore, all of COSMOROM's liabilities, except for liabilities to OTE International up to euros 16 million and third party liabilities up to euros 2 million will be capitalized or written-off by the completion date of the transaction.

Additionally, COSMOTE and ROMTELECOM have entered into a Shareholders' Agre ement providing for certain minority protection rights for ROMTELECOM. The transaction is subject to approval by the Extraordinary General Shareholders' Meeting of COSMOTE, scheduled to take place on 27.6.2005. According to the principal agreement governing the transaction, which was signed today, closing of the transaction is scheduled to take place by no later than 16.8.2005. COSMOROM, the 3rd GSM operator in the Romanian mobile market, whose activities have been limited over the last few years, holds a GSM license, which is anticipated to be modified to include the right to use frequencies in both EGSM 900 and GSM 1800 MHz frequency band. The term of the license is also anticipated to be extended to April 2014. With a solid track record and its accumulated experience in successfully managing mobile operations in Greece, Albania , Bulgaria and F.Y.R.O.M., COSMOTE will relaunch the operations of COSMOROM. Morgan Stanley acted as financial advisor to COSMOTE in respect of this transaction.

Mr Panagis Vourloumis Chairman and CEO of OTE, and Chairman of COSMOTE commented: ?The relaunch of COSMOROM will be a challenge for COSMOTE. However, COSMOTE, our Group's mobile arm, ranks among the five best mobile operators in Europe, and has proven its ability in Greece and Albania, and recently in Bulgaria and FYROM. The project of relaunching COSMOROM has been thoroughly examined and planned, and though we do not underestimate the difficulties, we are confident that it is going to succeed. COSMOTE's CEO, Evangelos Martigopoulos, commented: ?We are very satisfied that through COSMOROM and in cooperation with ROMTELECOM, COSMOTE will soon launch mobile operations in Romania, a market of strategic importance with attractive characteristics, strong growth and opportunities for substantial returns. Through our new initiative, COSMOTE's addressable population will double to 45m people, in five countries in South-East Europe. This transaction, under the agreed conditions, fulfils our investment decision criteria, offering significant upside potential for COSMOTE. We are looking forward to creating a new COSMOROM for the benefit of our shareholders and the Romanian consumers.?